Fed Chair Powell Warns of Inflation Risks as S&P 500 Shows Resilience Amid Tariff Volatility
Federal Reserve Chairman Jerome Powell has issued a cautionary note to investors, signaling potential inflationary pressures from recent tariff policies. The warning comes as the S&P 500 demonstrates remarkable resilience, rallying 33% from its April low despite historic volatility triggered by trade policy announcements.
Market dynamics took a dramatic turn when President Trump's April tariff declaration caused the S&P 500 to plummet 10.5%—marking its fifth-largest two-day drop in history. The index came within striking distance of bear market territory, declining 19% from its peak before rebounding sharply on tariff delays.
The Federal Open Market Committee's recent 25-basis-point rate cut to 4%-4.25% reflects growing economic concerns. Powell emphasized the Fed's data-dependent approach, with particular attention to how trade policies might Ripple through inflation metrics in coming months.
